Which of the Following Statements Is CORRECT, Assuming Stocks Are

question 37

Multiple Choice

Which of the following statements is CORRECT, assuming stocks are in equilibrium?

• A) assume that the required return on a given stock is 13%. if the stock's dividend is growing at a constant rate of 5%, its expected dividend yield is 5% as well.
• B) a stock's dividend yield can never exceed its expected growth rate.
• C) a required condition for one to use the constant growth model is that the stock's expected growth rate exceeds its required rate of return.
• D) other things held constant, the higher a company's beta coefficient, the lower its required rate of return.
• E) the dividend yield on a constant growth stock must equal its expected total return minus its expected capital gains yield.

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Definitions:

Sexual Harassment

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature in the workplace or educational settings.

XYZ Corporation

A placeholder name typically used to refer to a hypothetical or anonymous corporation.

Sexual Relations

Interactions between individuals that involve sexual intimacy or activities.

Public Policy Exception

A legal principle that allows courts to not enforce a contract or clause if it is contrary to public interests or policies.